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Woolworths Holdings Limited

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Our opinion on the current state of WOOLIES(WHL)Woolworths (WHL) has been navigating a challenging few years, primarily due to the ill-fated acquisition of David Jones in Australia for AU$2.1 billion in 2014. This acquisition has resulted in significant write-downs totaling R12 billion, putting immense pressure on the group's financials. The purchase has been widely viewed as a strategic misstep by Ian Moir, the former CEO. Fortunately, Woolworths' food division has remained resilient, contributing positively to the group's overall performance. In January 2020, Woolworths brought in Roy Bagattini from Levi Strauss to replace Moir as Group CEO. Under Bagattini's leadership, the company has focused on cash generation, working capital management, and reducing debt levels. This strategy has helped improve its cash conversion ratio to nearly 95%, with a solid return on capital employed at 18.7%, significantly above its cost of capital. For the fiscal year ending June 30, 2024, Woolworths reported a modest turnover increase of 4% from continuing operations, but headline earnings per share (HEPS) fell by 16.8%. The group's net debt stands at R5.6 billion, with a debt-to-EBITDA ratio of 1.45x, which is within its target range. The Australian segment, despite its historical challenges, is now in a net cash position of A$39 million. In a trading update for the 18 weeks to November 3, 2024, the company reported encouraging growth, especially in its food segment, which saw turnover increase by 12.1%. The Fashion, Beauty, and Home (FBH) division showed signs of recovery, with turnover up by 3.5%. These results suggest a gradual improvement in Woolworths' core business areas, especially as consumer confidence improves. Technical Analysis and Outlook: We previously advised waiting for Woolworths' share to break through its long-term downward trendline before considering it for investment. This breakout occurred on September 19, 2024, at a price of 6654c. Since then, the share price has moved slightly higher to 6768c, indicating the potential beginning of a new upward trend. With a current P/E ratio of around 18.58, the share looks fairly valued given its recent performance improvements. Conclusion: While Woolworths still faces challenges, particularly with its Australian operations, the focus on cash flow, reduced debt, and strong performance in the food division are positive signs. The share now appears to be entering a new upward trend, making it a potential consideration for investors seeking exposure to a well-managed retail stock with improving fundamentals. However, given the company's past missteps, cautious optimism is advised.
JSE:WHL
by PDSnetSA
Our opinion on the current state of WOOLIES(WHL)The fall of Woolworths' (WHL) share price can largely be attributed to the costly acquisition of David Jones in Australia for AU$2.1 billion in 2014, which has since resulted in a R12 billion write-down from the original purchase price of R20 billion. Woolworths' food division has been the primary support for the group, while its fashion and clothing section has struggled in challenging trading conditions. On 14th January 2020, Woolworths appointed Roy Bagattini, from Levi Strauss, as Group CEO, replacing Ian Moir, with effect from 17th February 2020. Bagattini has been tasked with steering the company back to profitability, especially in the non-food sectors. In the results for the year ended 30th June 2024, Woolworths reported a 4% increase in turnover from continuing operations, but a 16.8% decline in headline earnings per share (HEPS). The company ended the year with net borrowings of R5.6 billion, though its Australian subsidiaries held a net cash position of AU$39 million. Woolworths achieved a net debt-to-EBITDA ratio of 1.45 times, within its targeted gearing ratio, and reported a Return on Capital Employed (ROCE) of 18.7%, well above its weighted average cost of capital (WACC) of 13.9%. We advise caution and suggest considering Woolworths shares only if they break upward through their current downward trendline. The current price-to-earnings (P:E) ratio stands at around 16.78, but the shares are still falling, although they may be stabilizing.
JSE:WHL
by PDSnetSA
Our opinion on the current state of WOOLIES(WHL)The sad fall of the Woolworths share (WHL) price was occasioned by the decision of previous CEO, Ian Moir, and his board to buy David Jones in Australia for AU$2.1bn, which has now had R12bn written off its original purchase price of R20bn in 2014. The only aspect sustaining the Woolworths group was its food sales. Woollies announced on 14th January 2020 that they had appointed Roy Bagattini, from Levi Strauss, to replace Ian Moir as Group CEO with effect from 17th February 2020. Woolies' fashion and clothing section was also not doing that well in a very difficult trading environment. In its results for the six months to 24th December 2023, the company reported group turnover down 16.7% and headline earnings per share (HEPS) down 31%. The company said, "The Group's results for the first half of the 2024 financial year ('current period' or 'period') are not directly comparable to that of the prior period, given the inclusion of the David Jones contribution in the prior period." In a trading statement for the 53 weeks to 30th June 2024, the company estimated that HEPS would fall by between 27% and 32%—partly because of its disposal of David Jones in Australia. We recommend that you only consider Woolies shares when they break up through its current downward trendline. The current P:E is around 14.21, and the shares are still falling but may be stabilizing.
JSE:WHL
by PDSnetSA
Our opinion on the current state of WOOLIES(WHL)The sad fall of the Woolworths (WHL) share price was largely due to the decision of previous CEO, Ian Moir, and his board to buy David Jones in Australia for AU$2.1bn. This acquisition has now had R12bn written off its original purchase price of R20bn in 2014. The only aspect sustaining the Woolworths group was its food sales. On 14th January 2020, Woolworths announced that they had appointed Roy Bagattini, from Levi Strauss, to replace Ian Moir as Group CEO with effect from 17th February 2020. Woolies' fashion and clothing section was also not performing well in a very difficult trading environment. In its results for the six months to 24th December 2023, the company reported group turnover down 16.7% and headline earnings per share (HEPS) down 31%. The company said, "The Group's results for the first half of the 2024 financial year ('current period' or 'period') are not directly comparable to that of the prior period, given the inclusion of the David Jones contribution in the prior period." In a trading statement for the 53 weeks to 30th June 2024, the company estimated that HEPS would fall by at least 20% - partly due to its disposal of David Jones in Australia. We recommend that you only consider Woolies shares when they break up through their current downward trendline, which does not look like happening anytime soon. The current P:E is around 13.18, and the shares are still falling. Given the challenging retail environment, the significant write-downs on the David Jones acquisition, and the ongoing issues with its fashion and clothing segment, Woolworths faces significant headwinds. Investors should be cautious and look for signs of a sustainable turnaround, such as improved financial performance and breaking the downward trendline, before considering investing in Woolworths shares.
JSE:WHL
by PDSnetSA
$JSEWHL - Woolworths: Double Top Neckline Breached!See link below for previous analysis. Price has breached the 5824 neckline. Now, there are two ways to interpret this pattern: 1- the tradition way; in this case this is a Double Top and the price target is 3600cps. 2- the Elliot Wave way; this is a flat and price can resume the uptrend. The only certainty is uncertainty; this is the why it is key to think in probabilities. I will sit on my hands and allow price to guide me.
JSE:WHL
by Loyiso_BlaqueSoros_Mpeta
Our opinion on the current state of WHLThe sad fall of the Woolworths share (WHL) price was occasioned by the decision of previous CEO, Ian Moir, and his board to buy David Jones in Australia for AU$2,1bn which has now had R12bn written off its original purchase price of R20bn in 2014. The only aspect sustaining the Woolworths group was its food sales. Woollies announced on 14th January 2020 that they had appointed Roy Bagattini, from Levi Strauss, to replace Ian Moir as Group CEO with effect from 17th February 2020. Woolies fashion and clothing section was also not doing that well in a very difficult trading environment. In its results for the 53 weeks to 25th June 2023 the company reported turnover up 7% and headline earnings per share (HEPS) up 29%. The company said, "Turnover and concession sales from continuing operations (i.e. excluding David Jones) increased by 10.8% for the year and by 9.3% in comparable stores. Sales grew by 9.2% in the second half of the year ('H2' or 'half'). Online sales grew by 9.3%." On 31st October 2023 the company announced that it had acquired 93,45% of Absolute Pets for cash. Absolute Pets has over 150 stores throughout South Africa. In a report on the 20 weeks to 12th November 2023 the company reported turnover up 4,7% in constant currencies. The company said, "Group turnover and concession sales on a total basis (including the contribution of David Jones in the prior period, which is therefore non-comparable) decreased by 22.4% on the prior period." In a trading statement for the 26 weeks to 24th December 2023 the company estimated that HEPS from continuing operations would fall by between 5% and 10%. During the period, the company's turnover in constant currencies increased by 4,4%. The company said, "In South Africa, our business operations were further disrupted by higher levels of loadshedding, congestion at the ports, and the impact of Avian flu on the availability of key food product lines." We recommended that you consider Woolies shares when they broke up through its long-term downward trendline. This occurred on 4th May 2021 at a price of 4927c. It has since recovered to 6497c. The current P:E is around 12,62 and the share still appears to have upside potential.
JSE:WHL
by PDSnetSA
JSE:WHL painting bearish price action, set to slip lower.JSE's Woolworths Holdings Limited took a sharp nose dive in November 2015 from its all time highs of R108.00 and tumbled all the way to R24.00 where it found support in March 2020. Typical bullish short term bullish pullback trends lasted 6-8 months in that entire period. After price had found support it painted a steep rising channel which got capped off at around the R80.00 level and painted a double top, with the first top being in February 2023 and the 2nd one being in August 2023. When we look at the latest price action, price impulsively fell in wave 1 after painting the 2nd top and is currently caught in a corrective wave 2 bearish pennant pattern with the Daily & Weekly RSI at neutral levels above the smoothing average. A downward break of this pennant could signal wave 3 of the downward move, with its termination being around R47.00 past the double top neckline that's sitting at R58.00. A short term wave 4 pullback could be found around R47.00, potentially being the retest of the broken neckline before the stock plunges into wave 5 that could potentially terminate at around R30.00, representing an 88.6% fill of the steep rising channel. At these levels we can expect price to paint a correction that will either indicate a reversal of this entire downward move or its continuation in the higher wave degrees. Current sentiments: Strongly Bearish with invalidation being put on the table if the stock starts trading and holding well above R72.50.
JSE:WHLShort
by Source_Sailor
Our opinion on the current state of WHLThe sad fall of the Woolworths share (WHL) price was occasioned by the decision of previous CEO, Ian Moir, and his board to buy David Jones in Australia for AU$2,1bn which has now had R12bn written off its original purchase price of R20bn in 2014. The only aspect sustaining the Woolworths group was its food sales. Woollies announced on 14th January 2020 that they had appointed Roy Bagattini, from Levi Strauss, to replace Ian Moir as Group CEO with effect from 17th February 2020. Woolies fashion and clothing section was also not doing that well in a very difficult trading environment. In its results for the 53 weeks to 25th June 2023 the company reported turnover up 7% and headline earnings per share (HEPS) up 29%. The company said, "Turnover and concession sales from continuing operations (i.e. excluding David Jones) increased by 10.8% for the year and by 9.3% in comparable stores. Sales grew by 9.2% in the second half of the year ('H2' or 'half'). Online sales grew by 9.3%." On 31st October 2023 the company announced that it had acquired 93,45% of Absolute Pets for cash. Absolute Pets has over 150 stores throughout South Africa. In a report on the 20 weeks to 12th November 2023 the company reported turnover up 4,7% in constant currencies. The company said, "Group turnover and concession sales on a total basis (including the contribution of David Jones in the prior period, which is therefore non-comparable) decreased by 22.4% on the prior period". We recommended that you consider Woolies shares when they broke up through its long-term downward trendline. This occurred on 4th May 2021 at a price of 4927c. It has since recovered to 6952c. The current P:E is around 13,51 and the share still appears to have upside potential.
JSE:WHL
by PDSnetSA
Our opinion on the current state of WHLThe sad fall of the Woolworths share (WHL) price was occasioned by the decision of previous CEO, Ian Moir, and his board to buy David Jones in Australia for AU$2,1bn which has now had R12bn written off its original purchase price of R20bn in 2014. The only aspect sustaining the Woolworths group was its food sales. Woollies announced on 14th January 2020 that they had appointed Roy Bagattini, from Levi Strauss, to replace Ian Moir as Group CEO with effect from 17th February 2020. Woolies fashion and clothing section was also not doing that well in a very difficult trading environment. In regard to the recent civil unrest the company said, "Eleven Woolworths stores have been looted and severely damaged with nine of the eleven stores in KZN and two in Gauteng". In its results for the 53 weeks to 25th June 2023 the company reported turnover up 7% and headline earnings per share (HEPS) up 29%. The company said, "Turnover and concession sales from continuing operations (i.e. excluding David Jones) increased by 10.8% for the year and by 9.3% in comparable stores. Sales grew by 9.2% in the second half of the year ('H2' or 'half'). Online sales grew by 9.3%." On 31st October 2023 the company announced that it had acquired 93,45% of Absolute Pets for cash. Absolute Pets has over 150 stores throughout South Africa. We recommended that you consider Woolies shares when they broke up through its long-term downward trendline. This occurred on 4th May 2021 at a price of 4927c. It has since recovered to 6943c. The current P:E is around 13,49 and the share still appears to have upside potential.
JSE:WHL
by PDSnetSA
WOOLWORTHS HOLDINGS (WHL)Trading Analysis for Woolworths on the JSE: Woolworths (WHL) is set to announce their FY23 results on 30th August 2023, following a significant 35% rally since June 2023. However, Their recent trading update revealed that HEPS (Headline Earnings Per Share) fell below expectations, accompanied by negative concerns around load shedding. Currently, the price is testing a supply area, raising the possibility of a double top formation. This pattern suggests potential downward movement in the stock. Short Position: Target 1 (T1): 71.00 Target 2 (T2): 64.50
JSE:WHLShort
by MarketMeistersTrading
2
$JSEWHL - Woolworths: Potential Double Top AlertWoolworths stock had a good run from March 2020 to Feb 2023, peaking at 8047cps. What followed was a strong correction to 5824 and a rally just above the previous peak to make a slight new high at 8113. This "twin peak" could potentially be a double top formation with a neckline at 5824 or a flat correction. With the stock trading in the middle of support (5824) and resistance (8100) I will maintain a neutral stance and look for buy opportunities around 5824. Implications: Double Top - break below 5824 confirms the pattern with a target price of 3535. Flat pattern - price can turn around below 5824 and rally up.
JSE:WHL
by Loyiso_BlaqueSoros_Mpeta
#PAIRtradeIDEA Long WHL vs. Short TRUWoolworths has reversed off its bottom channel of relative strength vs. Truworths. RSI and MACD relatively depressed and should start to turn up. With the current state of the economy I believe Woollies should be better placed to withstand the economic storm than Truworths which is predominantly more of a 'luxury' clothing retailer. I think Woolies Food component should be the difference here into the next few weeks. In an inflationary and high interest rate environment, people still need to eat, they don't really need new or expensive clothes. On this fundamental basis and because I like the technicals I am looking to put on the trade as follows: Entry - 0.90 to 0.94 Stop loss - 0.84 Target 1 - 1.06, Target 2 - 1.12 If you manage to reach both targets with an average of 1.09 exit, We are looking at roughly 0.19 upside at a 0.90 entry for a risk of 0.06 which makes this a good 3:1 risk reward ratio Happy Trading <3
JSE:WHLLong
by MarcoOlevano
#WHL Woolies looking constructive #JSEConstructive engulfing candle over prior 6 days closes on Woolies today. Old resistance R64.60 acting as support. Still enclosed in a channel which needs a break to the upside. 61.8 fib from May to Aug swing low and high has also held. A break out this channel and a close above the 200dma at approx R68.50 will really give the bulls something to really get excited above. Early signs are there to watch for a larger move higher but not quite out the woods yet. R65.00 and R61.50 are good entry levels to stagger in if not in already.
JSE:WHLLong
by MarcoOlevano
WHL: bullish crossoverThe share depicts an intriguing trading pattern. The defining level that stands out prominently is the 6700 mark. This price level seems to be a critical pivot point, distinguishing the trend direction for the share. 1. The 6700 Pivot Point: The price level of 6700 acts as a significant trend delineator. When the share price is above this mark, it indicates a bullish sentiment, and when below, it suggests a bearish sentiment. The recent price actions nearing this level suggest that the share is at a crucial juncture. 2. Fibonacci Retracement Levels: Several Fibonacci retracement levels are marked on the chart. The share seems to be testing the 50.0% level and has previously found support near the 61.8% level. 3. Target and Stop Levels: A bullish target is set at 7300, indicating an upside potential of +7.7%. On the flip side, a stop loss level is marked at 6500, translating to a downside risk of -4.2%. The win/loss ratio based on these levels is 1.8:1, which means the potential reward outweighs the risk. 4. Bullish Crossover in Momentum Indicators: The lower part of the chart depicts a momentum indicator showing a bullish crossover. This crossover, where the blue line surpasses the orange, indicates rising bullish momentum and can be a positive sign for the share in the near term. Conclusion: The share is at a critical level with the 6700 price point acting as a significant trend determinant. With the current momentum and the Fibonacci retracement levels in play, traders might consider taking positions based on these technical cues, always keeping in mind the predefined target and stop levels. Remains a risky trade.
JSE:WHLLong
by Peet_Serfontein
Woolworths LTD Stock Analysis: Unpacking the Reverse Inverted C&Woolworths LTD Stock Analysis: Unpacking the Reverse Inverted C&H Formation Woolworths LTD 1. Price Formation: The price has broken from a Reverse Inverted C&H price formation on a daily chart. 2. Moving Averages: The 7-day moving average (MA) is below the 21-day MA, which is a positive sign indicating short-term bearish momentum. 3. 200-day Moving Average is above the Price. 4. Thus, Mas 7<21<200 5. Relative Strength Index (RSI): The RSI is <than 50, indicating bearish momentum and potential further upward movement. 6. Price Target: 5800 Zcents
JSE:WHLShort
by Sahle
JSE's Woolworths showing potential continued bearishness.After reaching highs of R108.00 on 02 November 2015, "Woolies" took a dive and found support at R24.00 on 23 Mar 2020. The instrument has since painted a rising channel and buyers failed to take price higher than the R81.00 ~ R84.00 resistance zone, effectively painting a double top at resistance. Looking at the current price action, after painting a double top structure price closed strongly bearish at the 50 Week EMA (also strongly bearish below the 50 Day EMA on the daily time frame). Warning of continued bearishness can be taken if the instrument strongly closes and consolidates below R68.50, which will also be below the 50 Week MA. First targets to the downside will be R66.80, then R62.00 and finally R58.24 Below R58.24 Woolies may tumble to R30.00 ~ R24.00. Like, comment and follow if the above analysis was helpful.
JSE:WHLShort
by Source_Sailor
Our opinion on the current state of WHLThe sad fall of the Woolworths share (WHL) price was occasioned by the decision of previous CEO, Ian Moir, and his board to buy David Jones in Australia for AU$2,1bn which has now had R12bn written off its original purchase price of R20bn in 2014. The only aspect sustaining the Woolworths group was its food sales. Woollies announced on 14th January 2020 that they had appointed Roy Bagattini, from Levi Strauss, to replace Ian Moir as Group CEO with effect from 17th February 2020. Woolies fashion and clothing section was also not doing that well in a very difficult trading environment. In regard to the recent civil unrest the company said, "Eleven Woolworths stores have been looted and severely damaged with nine of the eleven stores in KZN and two in Gauteng". In its results for the 53 weeks to 25th June 2023 the company reported turnover up 7% and headline earnings per share (HEPS) up 29%. The company said, "Turnover and concession sales from continuing operations (i.e. excluding David Jones) increased by 10.8% for the year and by 9.3% in comparable stores. Sales grew by 9.2% in the second half of the year ('H2' or 'half'). Online sales grew by 9.3%." We recommended that you consider the share when it broke up through its long-term downward trendline. This occurred on 4th May 2021 at a price of 4927c. It has since recovered to 7544c. The current P:E is around 14,36 and the share still appears to have upside potential.
JSE:WHL
by PDSnetSA